How you look at a situation usually defines how you analyze it and the kinds of solutions you come up with as a result.
The problem is that quite often it is only after you have spent some time on the analysis that you find out that the way you were looking at the situation in the first place was wrong.
The maxim “Invert, always invert” was a favourite of the German mathematician Jacobi who believed you could solve many hard problems by thinking about them upside down.
Take a famous example from Edward de Bono about the problems of pollution. Factories along a river were taking in water, using it and putting their polluted water back into the river. The last factory received the most polluted water.
The question asked was how to ensure that factories cleaned their water first before putting it into the river. Did it need a legislative solution? A technical one?
de Bono’s simple idea was to invert the input and output and require all factories on the river to have their water intake pipe downstream of their output. This means that they would be the first to suffer from their own pollution and give them a strong incentive to clean up.
Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has talked about the importance of inversion in making investment decisions.
The secret to being smart, he says, is to avoid doing dumb things.
If you avoid doing dumb things for long enough, like taking drugs and racing trains to the crossing, then eventually the decisions you do take will result in good outcomes, and you will look smart as a result.
Inversion, or upside down thinking, can be applied to many situations in life and business.
If you have a goal you want to reach, thinking about the things that will stop you achieving that goal can help you take the right decisions on what to do and what not to do.
If you are facing a business challenge, re-stating the problem may create new approaches that you hadn’t thought of before.
For example, if your car park is too full, you might consider how to increase its capacity – and that leads to solutions like buying more space, expanding and investing more money.
Instead, asking how you can reduce the number of cars in the car park may result in different solutions – encourage car sharing, moving to other locations or encouraging home working, getting to the same point but with less investment.
In investing, after you have come up with all the reasons why you should buy something, it is a good idea to list out the reasons why it is a bad idea to buy it as well.
Looking at things the wrong way round, or upside down, can expand the way in which we think about problems and create a richer set of solutions for us to pick from – increasing our chances of making good decisions time after time.